DUBLIN, April 26 (Reuters) - Belgium’s Recticel rejected a 700 million euro bid from Ireland’s Kingspan for its insulation and flexible foams units on Friday but said it was open to a takeover at the right price.
Insulation specialist Kingspan made the unsolicited approach earlier this month when it said it had also struck a deal with Austrian manufacturer Greiner to sell on the flexible foams businesses if the acquisition went ahead.
Recticel rejected the offer citing negative tax consequences for it and its shareholders. It said it significantly underestimated the standalone value of the two units and would leave it with a residual bedding and automotive business that it considered an “unattractive proposition”.
The Brussels-based firm also raised concerns that the offer would trigger regulatory risks and that it still did not have sufficient clarity regarding the carve-out with Greiner.
However Recticel said it received an approach by Kingspan on April 23 in relation to a possible offer for the entire group at 10 euros per share - excluding the 2018 dividend - and while this had been rejected it was open to a better offer.
“The board remains open to consider and engage with Kingspan to discuss a possible acquisition of all outstanding securities of Recticel, at the right terms and conditions, in line with its fiduciary duties,” it said in a statement.
Kingspan responded by saying it noted the views expressed in the statement and that it had nothing further to add.
Analysts at Davy Stockbrokers said it was no great surprise that Recticel had rejected the approach but that it remained very positive about the concept of a combination of Kingspan’s insulation boards and Recticel’s insulation operations.
The insulation business made up 18 percent of Recticel’s 1.5 billion euros of annual sales in 2017, compared to the 41 percent made up by the flexible foams but was more profitable, driving 33 percent of its earnings. (Reporting by Padraic Halpin; editing by Jason Neely)